Robert Reich: The Only Social Security Reform Worth Considering: Raising the Ceiling on Income...

[ProSense]

The Only Social Security Reform Worth Considering: Raising the Ceiling on Income Subject to It

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Now that Social Security has started to pay out more than it takes in, Social Security can simply collect what the rest of the government owes it. This will keep it fully solvent for the next 26 years.

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Back in 1983, the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security. That 90 percent figure was built into the Greenspan Commission’s fixes. The Commission assumed that, as the ceiling rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.

Today, though, the Social Security payroll tax hits only about 84 percent of total income.

It went from 90 percent to 84 percent because a larger and larger portion of total income has gone to the top. In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today the top 1 percent takes in more than 20 percent.

If we want to go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000.

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[mnhtnbb]

1. Thanks for posting.

[Frustratedlady]

2. Why not remove the ceiling completely?

Place a ceiling on Medicare and Social Security benefits. The rich don't need Medicare OR SS payments. They don't want taxes? Nail them some other way and call it benefit-exception.

Their lawyers and CPAs will figure out some loophole, anyway!

[BeyondGeography]

3. It's a measure of American insanity that we still tippy-toe around this obvious solution

[B Calm]

4. Raise the ceiling and lower the retirement age, thus providing many jobs

to the unemployed!

[godai]

5. The completely obvious solution that's rarely mentioned. n/t